Assessing efficiency of road contracts can lead to less risk, more innovation says civil engineer

The most recent survey of the nation's highway infrastructure, conducted by the American Society of Civil Engineers in 2005, indicated that the U.S. road system is in poor condition, a marked contrast from the 1988 survey by the National Council on Public Works Improvement. At that time, the nation's roads were cited to be in better than fair condition.

In Virginia, the state’s Department of Transportation (VDOT) is working with a number of private companies in order to provide a timely and less costly solution to its improvement and maintenance of the Commonwealth’s infrastructure needs. The passage of the 1995 Public-Private Transportation Act (PPTA) of Virginia authorized VDOT’s partnerships with private firms.

Within three months of the passage of PPTA, the private contracting firm of Virginia Maintenance Services (VMS) was awarded a contract to administer and maintain some 250 miles of Virginia’s interstate highways along I-81, I-77, I-95, and I-381. At that time, the contract provided coverage for some 20 per cent of the state’s highways.

“A very important part of the contract between VDOT and VMS was its performance-based nature,” says Jesús M. de la Garza, the Vecellio Professor of Civil and Environmental Engineering at Virginia Tech.

“A performance-based contract specifies the desired outcomes rather than the desired processes to reach those outcomes. A performance-based contract leaves the contractor free, in any sense, to choose and apply the construction methods he wishes to carry out,” de la Garza adds.

de la Garza, who specializes in construction engineering and highway infrastructure management and who is a member of the university’s Myers-Lawson School of Construction, says the nature of the performance-based contract leads to two significant results.

First, it imposes the risk of deficient design on the contractor, and second, it often makes the contractor seek innovative construction methods.

“Thus, the term performance-based contracting is used interchangeably with innovative contracting,” de la Garza asserts.

The professor in the Via Department of Civil and Environmental Engineering is assisting VDOT in its assessment of the performance-based contracts it issues. For the past seven years, de la Garza has led efforts to identify innovative ways to measure the effectiveness of the performance-based road maintenance contracts VDOT awards. The evaluation for effectiveness focuses primarily on the physical level of service of the interstate.

He has developed an effectiveness model to perform these evaluations, extending back to the first PPTA pilot project with VMS. He is now in the process of developing a unique efficiency measurement model.

“Not knowing how efficient state DOTs are in being effective can lead to excessive and unrealistic maintenance budget expectations,” de la Garza says.

His work is conducted through Virginia Tech’s Center for Highway Asset Management ProgramS (CHAMPS).

His new investigations are looking at both the driver’s as well as the maintenance provider’s views on the efficiency of the work. It is also taking into account safety and other societal goals, as well as uncontrollable considerations such as climate and location.

He believes the efficiency measurement model will be able to identify the relative efficiency of different VDOT districts in performing maintenance services, the reasons for the efficiency differences between districts, the effects of the environmental and operational factors on the road maintenance efficiency of districts, and the benchmarks and best practices that pertain to the inefficient districts.

Since the PPTA pilot program began in 1996, VDOT has now privatized 79 percent of the interstate maintenance activities, and expects to reach 100 percent by the end of 2008. CHAMPS is responsible for performing the baseline asset condition assessment and the annual asset evaluations to determine the extent to which maintenance contractors are achieving the performance-based targets. Anderson and Associates, Inc., a Blacksburg, Va., based engineering firm, is providing data collection services to CHAMPS.

CHAMPS is also assisting VDOT in the development of its biennial needs-based overall maintenance budget by conducting a random assessment of assets located in all three highway systems –– interstate, primary, and secondary –– throughout the Commonwealth.

VDOT has awarded some $9.3 million to CHAMPS since these projects started, and in June 2007, the National Science Foundation announced a two-year $200,000 grant to help fund de la Garza’s efficiency framework.

In addition to his cadre of graduate students, six undergraduate students have worked with de la Garza on this project, and have since joined the School of Construction’s graduate program.

The Commonwealth of Virginia has been at the forefront of innovations in procurement and contracting strategies since the passage of the Public-Private Transportation Act in 1995. Other states are now learning of VDOT's strategiv vision and trying to emulate it.